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Unformatted text preview: b = = = .25 ∑ xy - nxy ∑ x 2- nx 2 51.5 - (6)(3)(2.5) 80 - (6)(32) a = y- b x = 2.5 - (.25)(3) = 1.75 5 Associative Forecasting Example 4.0 – 3.0 – 2.0 – 1.0 – | | | | | | | 1 2 3 4 5 6 7 Sales Area payroll y = 1.75 + .25 x ^ Sales = 1.75 + .25( payroll ) If payroll next year is estimated to be $600 million, then: Sales = 1.75 + .25(6) Sales = $325,000 3.25 6 Focus Forecasting Developed at American Hardware Supply, focus forecasting is based on two principles: 1. Sophisticated forecasting models are not always better than simple models 2. There is no single techniques that should be used for all products or services This approach uses historical data to test multiple forecasting models for individual items The forecasting model with the lowest error is then used to forecast the next demand...
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- Spring '08
- MOODIE
- Forecasting, Regression Analysis, $000,000, $325,000, associative forecasting, $000,000,000
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